##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 001-14429
 SKECHERS U.S.A., INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    95-4376145(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)228 Manhattan Beach Blvd. 
Manhattan Beach, California
(Address of Principal Executive Office)
    
    90266
(Zip Code)
 (310) 318-3100
(Registrants Telephone Number, Including Area Code)
 þ o
 o o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



SKECHERS U.S.A., INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Operations and Comprehensive Income
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4.
    
    Controls and Procedures
    
    
    25PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    25Item 1A.
    
    Risk Factors
    
    
    26Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    27Item 6.
    
    Exhibits
    
    
    27Signatures
    
    
    28EX-31.1EX-31.2EX-32.1
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
 June 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    257,024
    
    
    $
    114,941Trade accounts receivable, less allowances of $11,848 in 2009 and $14,880 in 2008
    
    
    193,729
    
    
    
    175,064Other receivables
    
    
    10,713
    
    
    
    7,816Total receivables
    
    
    204,442
    
    
    
    182,880Inventories
    
    
    191,283
    
    
    
    261,209Prepaid expenses and other current assets
    
    
    31,991
    
    
    
    31,022Deferred tax assets
    
    
    11,955
    
    
    
    11,955Total current assets
    
    
    696,695
    
    
    
    602,007Property and equipment, at cost, less accumulated depreciation and amortization
    
    
    174,411
    
    
    
    157,757Intangible assets, less accumulated amortization
    
    
    5,036
    
    
    
    5,407Deferred tax assets
    
    
    12,609
    
    
    
    18,158Long-term marketable securities
    
    
    
    
    
    
    81,925Other assets, at cost
    
    
    12,450
    
    
    
    11,062TOTAL ASSETS
    
    $
    901,201
    
    
    $
    876,316LIABILITIES AND EQUITYCurrent Liabilities:Current installments of long-term borrowings
    
    
    642
    
    
    
    572Short-term borrowings
    
    
    639
    
    
    
    Accounts payable
    
    
    178,066
    
    
    
    164,643Accrued expenses
    
    
    16,764
    
    
    
    23,021Total current liabilities
    
    
    196,111
    
    
    
    188,236Long-term borrowings, excluding current installments
    
    
    15,858
    
    
    
    16,188Total liabilities
    
    
    211,969
    
    
    
    204,424Commitments and contingenciesEquity:Preferred Stock, $.001 par value; 10,000 authorized; none issued and outstanding
    
    
    
    
    
    
    Class A Common Stock, $.001 par value; 100,000 shares authorized; 33,647 and
33,410 shares issued and outstanding at June 30, 2009 and December 31,
2008, respectively
    
    
    33
    
    
    
    33Class B Common Stock, $.001 par value; 100,000 shares authorized; 12,738 and
12,782 shares issued and outstanding at June 30, 2009 and December 31,
2008, respectively
    
    
    13
    
    
    
    13Additional paid-in capital
    
    
    265,763
    
    
    
    264,200Accumulated other comprehensive income (loss)
    
    
    7,306
    
    
    
    (4,719
    )Retained earnings
    
    
    411,460
    
    
    
    409,166Skechers U.S.A., Inc. equity
    
    
    684,575
    
    
    
    668,693Noncontrolling interest
    
    
    4,657
    
    
    
    3,199Total equity
    
    
    689,232
    
    
    
    671,892TOTAL LIABILITIES AND EQUITY
    
    $
    901,201
    
    
    $
    876,316
  3




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##### Table of Contents



SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(In thousands, except per share data)
 Three-Months Ended June 30,
    
    
    Six-Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    298,976
    
    
    $
    354,574
    
    
    $
    642,446
    
    
    $
    739,496Cost of sales
    
    
    176,373
    
    
    
    197,381
    
    
    
    394,414
    
    
    
    410,131Gross profit
    
    
    122,603
    
    
    
    157,193
    
    
    
    248,032
    
    
    
    329,365Royalty income
    
    
    332
    
    
    
    230
    
    
    
    604
    
    
    
    1,070122,935
    
    
    
    157,423
    
    
    
    248,636
    
    
    
    330,435Operating expenses:Selling
    
    
    34,813
    
    
    
    38,592
    
    
    
    56,323
    
    
    
    64,126General and administrative
    
    
    95,848
    
    
    
    98,857
    
    
    
    193,886
    
    
    
    198,079130,661
    
    
    
    137,449
    
    
    
    250,209
    
    
    
    262,205Earnings (loss) from operations
    
    
    (7,726
    )
    
    
    19,974
    
    
    
    (1,573
    )
    
    
    68,230Other income (expense):Interest income
    
    
    581
    
    
    
    1,835
    
    
    
    1,290
    
    
    
    4,294Interest expense
    
    
    (912
    )
    
    
    (1,347
    )
    
    
    (957
    )
    
    
    (2,353
    )Other, net
    
    
    245
    
    
    
    844
    
    
    
    27
    
    
    
    748(86
    )
    
    
    1,332
    
    
    
    360
    
    
    
    2,689Earnings (loss) before income taxes (benefit)
    
    
    (7,812
    )
    
    
    21,306
    
    
    
    (1,213
    )
    
    
    70,919Income tax (benefit) expense
    
    
    (1,186
    )
    
    
    7,045
    
    
    
    (1,939
    )
    
    
    23,814Net earnings (loss)
    
    
    (6,626
    )
    
    
    14,261
    
    
    
    726
    
    
    
    47,105Less: Net loss attributable to noncontrolling interest
    
    
    (699
    )
    
    
    (380
    )
    
    
    (1,567
    )
    
    
    (380
    )Net earnings (loss) attributable to Skechers U.S.A., Inc.
    
    $
    (5,927
    )
    
    $
    14,641
    
    
    $
    2,293
    
    
    $
    47,485Net earnings (loss) per share attributable to Skechers
U.S.A., Inc.:Basic
    
    $
    (0.13
    )
    
    $
    0.32
    
    
    $
    0.05
    
    
    $
    1.03Diluted
    
    $
    (0.13
    )
    
    $
    0.31
    
    
    $
    0.05
    
    
    $
    1.02Weighted average shares used in calculating earnings per
share attributable to Skechers U.S.A., Inc.:Basic
    
    
    46,282
    
    
    
    46,000
    
    
    
    46,252
    
    
    
    45,941Diluted
    
    
    46,282
    
    
    
    46,810
    
    
    
    46,424
    
    
    
    46,737Comprehensive income:Net earnings (loss)
    
    $
    (5,927
    )
    
    $
    14,641
    
    
    $
    2,293
    
    
    $
    47,485Unrealized gain (loss) on marketable securities, net of tax
    
    
    10,234
    
    
    
    (2,559
    )
    
    
    8,151
    
    
    
    (3,906
    )Gain (loss) on foreign currency translation adjustment, net
of tax
    
    
    6,836
    
    
    
    (159
    )
    
    
    3,874
    
    
    
    890Total comprehensive income
    
    $
    11,143
    
    
    $
    11,923
    
    
    $
    14,318
    
    
    $
    44,469
  4




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SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 Six-Months Ended June 30,2009
    
    
    2008Cash flows from operating activities:Net earnings
    
    $
    2,293
    
    
    $
    47,485Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:Noncontrolling interest in subsidiaries
    
    
    (1,567
    )
    
    
    (380
    )Depreciation of property and equipment
    
    
    9,337
    
    
    
    8,715Amortization of intangible assets
    
    
    410
    
    
    
    119Provision (recoveries) for bad debts and returns
    
    
    (352
    )
    
    
    4,954Tax benefits from stock-based compensation
    
    
    
    
    
    
    533Non-cash stock compensation
    
    
    1,210
    
    
    
    1,127Loss on disposal of property and equipment
    
    
    2
    
    
    
    1,538Provision for deferred income taxes
    
    
    (605
    )
    
    
    Impairment of property and equipment
    
    
    761
    
    
    
    (Increase) decrease in assets:Receivables
    
    
    (17,288
    )
    
    
    (68,316
    )Inventories
    
    
    71,199
    
    
    
    (29,841
    )Prepaid expenses and other current assets
    
    
    (548
    )
    
    
    (6,819
    )Other assets
    
    
    (1,357
    )
    
    
    (16,231
    )Increase (decrease) in liabilities:Accounts payable
    
    
    11,012
    
    
    
    19,655Accrued expenses
    
    
    (6,173
    )
    
    
    10,929Net cash provided by (used in) operating activities
    
    
    68,334
    
    
    
    (26,532
    )Cash flows from investing activities:Capital expenditures
    
    
    (26,860
    )
    
    
    (37,838
    )Purchases of investments
    
    
    
    
    
    
    (11,725
    )Maturities of investments
    
    
    375
    
    
    
    16,250Redemption of auction rate securities
    
    
    95,250
    
    
    
    Net cash provided by (used in) investing activities
    
    
    68,765
    
    
    
    (33,313
    )Cash flows from financing activities:Net proceeds from the issuances of stock through employee stock
purchase plan and the exercise of stock options
    
    
    958
    
    
    
    2,812Payments on long-term debt
    
    
    (166
    )
    
    
    (407
    )Increase in short-term borrowings
    
    
    639
    
    
    
    Contribution from noncontrolling interest of consolidated entity
    
    
    3,000
    
    
    
    3,000Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    528Net cash provided by financing activities
    
    
    4,431
    
    
    
    5,933Net increase (decrease) in cash and cash equivalents
    
    
    141,530
    
    
    
    (53,912
    )Effect of exchange rates on cash and cash equivalents
    
    
    553
    
    
    
    18Cash and cash equivalents at beginning of the period
    
    
    114,941
    
    
    
    199,516Cash and cash equivalents at end of the period
    
    $
    257,024
    
    
    $
    145,622Supplemental disclosures of cash flow information:Cash paid during the period for:Interest, net of amounts capitalized
    
    $
    1,978
    
    
    $
    2,527Income taxes
    
    
    1,030
    
    
    
    13,875
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SKECHERS U.S.A., INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2009 and 2008
(Unaudited)
 (1) GENERAL
 Basis of Presentation
   Use of Estimates
  Noncontrolling interests
 Noncontrolling Interests in Consolidated Financial Statements, and amendment of ARB no.
51
  6




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Recent accounting pronouncements
  (2) INVESTMENTS
  (3) REVENUE RECOGNITION
   (4) OTHER COMPREHENSIVE INCOME
  7




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Three-Months Ended
    
    
    Six-Months EndedJune 30, 2009
    
    
    June 30, 2009Net earnings (loss)
    
    $
    (6,626
    )
    
    $
    726Unrealized gain on marketable securities, net of tax
    
    
    10,234
    
    
    
    8,151Gain on foreign currency translation adjustment, net of tax
    
    
    6,881
    
    
    
    3,899Comprehensive income
    
    
    10,489
    
    
    
    12,776Comprehensive loss attributable to noncontrolling interest
    
    
    (654
    )
    
    
    (1,542
    )Comprehensive income attributable to parent
    
    $
    11,143
    
    
    $
    14,318
 (5) STOCK COMPENSATION
   WEIGHTED AVERAGE
    
    AGGREGATEWEIGHTED AVERAGE
    
    REMAINING
    
    INTRINSICSHARES
    
    EXERCISE PRICE
    
    CONTRACTUAL TERM
    
    VALUEOutstanding at December 31, 2008
    
    
    1,739,721
    
    
    $
    11.79Granted
    
    
    
    
    
    
    Exercised
    
    
    (23,618
    )
    
    
    7.64Cancelled
    
    
    (107,817
    )
    
    
    11.21Outstanding at June 30, 2009
    
    
    1,608,286
    
    
    
    11.89
    
    
    2.4 years
    
    $
    1,504,895Exercisable at June 30, 2009
    
    
    1,608,286
    
    
    
    11.89
    
    
    2.4 years
    
    $
    1,504,895
  WEIGHTED AVERAGEGRANT-DATE FAIRSHARES
    
    VALUENonvested at December 31, 2008
    
    
    217,284
    
    
    $
    16.97Granted
    
    
    2,500
    
    
    
    12.22Vested
    
    
    (101,807
    )
    
    
    17.10Cancelled
    
    
    
    
    
    
    Nonvested at June 30, 2009
    
    
    117,977
    
    
    
    16.76
 (6) EARNINGS (LOSS) PER SHARE
   8




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Three-Months Ended June 30,
    
    Six-Months Ended June 30,Basic earnings (loss) per share
    
    2009
    
    2008
    
    2009
    
    2008Net earnings (loss) attributable to Skechers
U.S.A., Inc.
    
    $
    (5,927
    )
    
    $
    14,641
    
    
    $
    2,293
    
    
    $
    47,485Weighted average common shares outstanding
    
    
    46,282
    
    
    
    46,000
    
    
    
    46,252
    
    
    
    45,941Basic earnings (loss) per share attributable to
Skechers U.S.A., Inc.
    
    $
    (0.13
    )
    
    $
    0.32
    
    
    $
    0.05
    
    
    $
    1.03
  Three-Months Ended June 30,
    
    
    Six-Months Ended June 30,Diluted earnings (loss) per share
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Net earnings (loss) attributable to Skechers U.S.A., Inc.
    
    $
    (5,927
    )
    
    $
    14,641
    
    
    $
    2,293
    
    
    $
    47,485Weighted average common shares outstanding
    
    
    46,282
    
    
    
    46,000
    
    
    
    46,252
    
    
    
    45,941Dilutive effect of stock options
    
    
    
    
    
    
    810
    
    
    
    172
    
    
    
    796Weighted average common shares outstanding
    
    
    46,282
    
    
    
    46,810
    
    
    
    46,424
    
    
    
    46,737Diluted earnings (loss) per share attributable to
Skechers U.S.A., Inc.
    
    $
    (0.13
    )
    
    $
    0.31
    
    
    $
    0.05
    
    
    $
    1.02
  (7) INCOME TAXES
  Interim Financial Reporting Accounting for Income Taxes in Interim Periods  an interpretation of
APB No. 28,
  9




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(8) LINE OF CREDIT AND SHORT-TERM BORROWINGS
   (9) STOCKHOLDERS EQUITY
  10




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Six-Months EndedJune 30, 2009Noncontrolling interest, January 1, 2009
    
    $
    3,199Net loss attributable to noncontrolling interest
    
    
    (1,567
    )Foreign currency translation adjustment
    
    
    25Capital contribution by minority partner
    
    
    3,000Noncontrolling interest, June 30, 2009
    
    $
    4,657
 (10) SEGMENT AND GEOGRAPHIC REPORTING INFORMATION
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net salesDomestic wholesale
    
    $
    160,890
    
    
    $
    201,400
    
    
    $
    341,389
    
    
    $
    422,183International wholesale
    
    
    61,490
    
    
    
    77,482
    
    
    
    161,040
    
    
    
    176,967Retail
    
    
    72,252
    
    
    
    71,174
    
    
    
    132,292
    
    
    
    131,752E-commerce
    
    
    4,344
    
    
    
    4,518
    
    
    
    7,725
    
    
    
    8,594Total
    
    $
    298,976
    
    
    $
    354,574
    
    
    $
    642,446
    
    
    $
    739,496
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Gross profitDomestic wholesale
    
    $
    55,881
    
    
    $
    75,905
    
    
    $
    112,387
    
    
    $
    164,060International wholesale
    
    
    20,258
    
    
    
    34,269
    
    
    
    53,846
    
    
    
    80,230Retail
    
    
    44,091
    
    
    
    44,762
    
    
    
    77,664
    
    
    
    80,806E-commerce
    
    
    2,373
    
    
    
    2,257
    
    
    
    4,135
    
    
    
    4,269Total
    
    $
    122,603
    
    
    $
    157,193
    
    
    $
    248,032
    
    
    $
    329,365
 June 30, 2009
    
    
    December 31, 2008Identifiable assetsDomestic wholesale
    
    $
    721,236
    
    
    $
    678,881International wholesale
    
    
    91,192
    
    
    
    110,930Retail
    
    
    88,603
    
    
    
    86,236E-commerce
    
    
    170
    
    
    
    269Total
    
    $
    901,201
    
    
    $
    876,316
 11




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Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Additions to property and equipmentDomestic wholesale
    
    $
    5,488
    
    
    $
    15,047
    
    
    $
    19,227
    
    
    $
    23,729International wholesale
    
    
    1,599
    
    
    
    547
    
    
    
    3,093
    
    
    
    736Retail
    
    
    3,367
    
    
    
    8,464
    
    
    
    4,540
    
    
    
    13,373Total
    
    $
    10,454
    
    
    $
    24,058
    
    
    $
    26,860
    
    
    $
    37,838
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales (1)United States
    
    $
    230,115
    
    
    $
    269,662
    
    
    $
    470,406
    
    
    $
    549,953Canada
    
    
    6,552
    
    
    
    11,360
    
    
    
    15,945
    
    
    
    24,304Other international (2)
    
    
    62,309
    
    
    
    73,552
    
    
    
    156,095
    
    
    
    165,239Total
    
    $
    298,976
    
    
    $
    354,574
    
    
    $
    642,446
    
    
    $
    739,496
 June 30, 2009
    
    
    December 31, 2008Long-lived assetsUnited States
    
    $
    164,209
    
    
    $
    148,228Canada
    
    
    554
    
    
    
    471Other international (2)
    
    
    9,648
    
    
    
    9,058Total
    
    $
    174,411
    
    
    $
    157,757
 
 (1)
    
    The Company has subsidiaries in Canada, United Kingdom, Germany, France, Spain, Italy,
Netherlands, Brazil, Chile and joint ventures in China, Hong Kong, Malaysia, Singapore and
Thailand that generate net sales within those respective countries and in some cases the
neighboring regions. The Company also has a subsidiary in Switzerland that generates net
sales from that country in addition to net sales to our distributors located in numerous
non-European countries. Net sales are attributable to geographic regions based on the location
of the Company subsidiary.(2)
    
    Other international consists of Brazil, Chile, China, Hong Kong, Malaysia, Singapore,
Thailand, Switzerland, United Kingdom, Germany, France, Spain, Italy and Netherlands. (11) BUSINESS AND CREDIT CONCENTRATIONS
   12




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Three Months Ended June 30,
    
    Six Months Ended June 30,2009
    
    2008
    
    2009
    
    2008Manufacturer #1
    
    
    29.7
    %
    
    
    32.2
    %
    
    
    26.3
    %
    
    
    31.5
    %Manufacturer #2
    
    
    12.4
    %
    
    
    11.5
    %
    
    
    11.3
    %
    
    
    11.6
    %Manufacturer #3
    
    
    11.3
    %
    
    
    10.4
    %
    
    
    11.0
    %
    
    
    8.6
    %Manufacturer #4
    
    
    10.8
    %
    
    
    7.9
    %
    
    
    10.2
    %
    
    
    7.2
    %Manufacturer #5
    
    
    7.2
    %
    
    
    7.0
    %
    
    
    7.3
    %
    
    
    6.8
    %71.4
    %
    
    
    69.0
    %
    
    
    66.1
    %
    
    
    65.7
    %
  13




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    international, national and local general economic, political and market conditions
including the recent global economic slowdown and financial crisis;
    
    sustaining, managing and forecasting our costs and proper inventory levels;
    
    losing any significant customers, decreased demand by industry retailers and
cancellation of order commitments due to the lack of popularity of particular designs
and/or categories of our products;
    
    maintaining our brand image and intense competition among sellers of footwear for
consumers;
    
    anticipating, identifying, interpreting or forecasting changes in fashion trends,
consumer demand for the products and the various market factors described above;
    
    sales levels during the spring, back-to-school and holiday selling seasons; and
    
    other factors referenced or incorporated by reference in our companys annual report
on Form 10-K for the year ended December 31, 2008.
    14




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##### Table of Contents



Three-Months Ended June 30,2009
    
    2008Percentage of revenues by segmentDomestic wholesale
    
    
    53.8
    %
    
    
    56.8
    %International wholesale
    
    
    20.6
    %
    
    
    21.8
    %Retail
    
    
    24.2
    %
    
    
    20.1
    %E-commerce
    
    
    1.4
    %
    
    
    1.3
    %Total
    
    
    100
    %
    
    
    100
    %
    Three-Months Ended June 30,
    
    
    Six-Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    298,976
    
    
    
    100.0
    %
    
    $
    354,574
    
    
    
    100.0
    %
    
    $
    642,446
    
    
    
    100.0
    %
    
    $
    739,496
    
    
    
    100.0
    %Cost of sales
    
    
    176,373
    
    
    
    59.0
    
    
    
    197,381
    
    
    
    55.7
    
    
    
    394,414
    
    
    
    61.4
    
    
    
    410,131
    
    
    
    55.5Gross profit
    
    
    122,603
    
    
    
    41.0
    
    
    
    157,193
    
    
    
    44.3
    
    
    
    248,032
    
    
    
    38.6
    
    
    
    329,365
    
    
    
    44.5Royalty income
    
    
    332
    
    
    
    0.1
    
    
    
    230
    
    
    
    0.1
    
    
    
    604
    
    
    
    0.1
    
    
    
    1,070
    
    
    
    0.2122,935
    
    
    
    41.1
    
    
    
    157,423
    
    
    
    44.4
    
    
    
    248,636
    
    
    
    38.7
    
    
    
    330,435
    
    
    
    44.7Operating expenses:Selling
    
    
    34,813
    
    
    
    11.6
    
    
    
    38,592
    
    
    
    10.9
    
    
    
    56,323
    
    
    
    8.8
    
    
    
    64,126
    
    
    
    8.7General and administrative
    
    
    95,848
    
    
    
    32.1
    
    
    
    98,857
    
    
    
    27.9
    
    
    
    193,886
    
    
    
    30.1
    
    
    
    198,079
    
    
    
    26.8130,661
    
    
    
    43.7
    
    
    
    137,449
    
    
    
    38.8
    
    
    
    250,209
    
    
    
    38.9
    
    
    
    262,205
    
    
    
    35.5Earnings (loss) from operations
    
    
    (7,726
    )
    
    
    (2.6
    )
    
    
    19,974
    
    
    
    5.6
    
    
    
    (1,573
    )
    
    
    (0.2
    )
    
    
    68,230
    
    
    
    9.2Interest income
    
    
    581
    
    
    
    0.2
    
    
    
    1,835
    
    
    
    0.6
    
    
    
    1,290
    
    
    
    0.2
    
    
    
    4,294
    
    
    
    0.6Interest expense
    
    
    (912
    )
    
    
    (0.3
    )
    
    
    (1,347
    )
    
    
    (0.4
    )
    
    
    (957
    )
    
    
    (0.2
    )
    
    
    (2,353
    )
    
    
    (0.3
    )Other, net
    
    
    245
    
    
    
    0.1
    
    
    
    844
    
    
    
    0.2
    
    
    
    27
    
    
    
    
    
    
    
    748
    
    
    
    0.1Earnings (loss) before income taxes
    
    
    (7,812
    )
    
    
    (2.6
    )
    
    
    21,306
    
    
    
    6.0
    
    
    
    (1,213
    )
    
    
    (0.2
    )
    
    
    70,919
    
    
    
    9.6Income tax (benefit) expense
    
    
    (1,186
    )
    
    
    (0.4
    )
    
    
    7,045
    
    
    
    2.0
    
    
    
    (1,939
    )
    
    
    (0.3
    )
    
    
    23,814
    
    
    
    3.2Net earnings (loss)
    
    
    (6,626
    )
    
    
    (2.2
    )
    
    
    14,261
    
    
    
    4.0
    
    
    
    726
    
    
    
    0.1
    
    
    
    47,105
    
    
    
    6.4Less: Net loss attributable to
noncontrolling interest
    
    
    (699
    )
    
    
    (0.2
    )
    
    
    (380
    )
    
    
    (0.1
    )
    
    
    (1,567
    )
    
    
    (0.2
    )
    
    
    (380
    )
    
    
    Net earnings (loss)
attributable to Skechers
U.S.A., Inc.
    
    $
    (5,927
    )
    
    
    (2.0
    )%
    
    $
    14,641
    
    
    
    4.1
    %
    
    $
    2,293
    
    
    
    0.3
    %
    
    $
    47,485
    
    
    
    6.4
    %
 15




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Net sales
      Gross profit
  16




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Selling expenses
   General and administrative expenses
  17




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Interest income
  Interest expense
  Income taxes
   Noncontrolling interest in net loss of consolidated subsidiaries
   Net sales
  18




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Gross profit
   19




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Selling expenses
  General and administrative expenses
  Interest income
  Interest expense
  Income taxes
  20




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Noncontrolling interest in net loss of consolidated subsidiaries
       21




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22




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23




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   Interest rate fluctuations
 Foreign exchange rate fluctuations
  24




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ITEM 4. CONTROLS AND PROCEDURES
        
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  25




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ITEM 1A. RISK FACTORS
  We Depend Upon A Relatively Small Group Of Customers For A Large Portion Of Our Sales.
  We Rely On Independent Contract Manufacturers And, As A Result, Are Exposed To Potential
Disruptions In Product Supply.
   26




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One Principal Stockholder Is Able To Control Substantially All Matters Requiring A Vote Of Our
Stockholders And His Interests May Differ From The Interests Of Our Other Stockholders.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Proposal
    
    Votes For
    
    Against/Withheld
    
    AbstentionsProposal No. 1 Election of Director NomineesRobert Greenberg
    
    
    148,846,070
    
    
    
    9,528,063
    
    
    
    Morton D. Erlich
    
    
    152,822,542
    
    
    
    5,536,598
    
    
    
    
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer and the Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ***
 
 ***
    
    In accordance with Item 601(b)(32)(ii) of Regulation S-K, this exhibit shall not be deemed
filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the
liability of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act. 27




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SIGNATURES
  Date: August 7, 2009
    SKECHERS U.S.A., INC.By:
    /S/ FREDERICK H. SCHNEIDERFrederick H. SchneiderChief Financial Officer
(Principal Financial and Accounting Officer) 28